Kroger Sales Rise as Grocer Benefits From Consumers Eating at Home

Prices, quantities sold, and costs are all increasing at Kroger (WSJ, Dec. 2021). Here are some money quotes.

1. "Kroger Co. KR +0.07% reported strong sales for the latest quarter as consumers continued to opt for eating at home, but said higher supply-chain costs are squeezing its profit.
   
   "The Cincinnati-based grocer said it has more inventory today than a year ago and that it incurred significant supply-chain costs to keep its shelves stocked. At the same time, most products are getting more expensive and the company said consumers are becoming price-sensitive.
2. "The company said it is passing down costs to consumers where possible and is choosing to hold down prices in some areas. It is consulting its historical data to identify which items people are willing to pay up for.
3. "As meat prices remain high, consumers are switching to less costly types of meat or store brands.
4. "grocery sales are higher than they were before the pandemic, as people continue to work remotely and cook more at home."

The article illustrates several concepts.

1. An increase in demand and its impact on price and quantity
2. A decrease in supply and its impact on price and quantity
3. Substitutes, elasticity, and pricing
4. Using data to learn about consumers.